CES: eMusic Broadens Business Model in Bid to Double Revenue in 2013

eMusic Debuts New 'eMusic Scenes' iPad App

eMusic Debuts New 'eMusic Scenes' iPad App

eMusic, which started selling music downloads four years before Apple Inc. launched the iTunes store, on Tuesday announced at the Consumer Electronics Show it is opening up its store to all buyers, not just members who pay a monthly fee.

"While our focus and core audience remains the same, our new business model now opens eMusic up for everyone to enjoy what we bring to the table: insightful editorial that we curate independently from our sales division, and personalized discovery technology that draws upon the diverse tastes of our unique eMusic community," said eMusic Chief Executive Adam Klein.

More than 42 million eMusic accounts have been created since 2004, though the company has not specified how many of those customers are still actively buying music. Of those who do, they tend to download full albums more often than individual tracks -- 82% of their music downloads are albums, with the rest being singles. Between 2011 to 2012, U.S. eMusic members downloaded a total of 6,202,694 albums, the company said. The company, which also sells digital books, is privately held and does not disclose revenue.

Monthly membership fees range from $6.49 to as much as $79.99 per month. In December, active eMusic customers in the U.S. spent an average of $16.22 with the service. In addition to the monthly fee, members pay about 49 cents a track, versus 69 cents to $1.29 at iTunes, Amazon or Google Play.

In addition to the discounts, members also get access to the company's extensive editorial archives, which date back to 2004. Under editor-in-chief J. Edward Keyes, eMusic has added about 100 reviews a month.

But the membership fee has dissuaded many potential customers. Klein anticipates the new business model will encourage even more users to become buyers.

"We have a number of exciting things we'll be announcing in 2013, many of which will be game changing and potentially industry-shifting," Klein says. "I'd venture to say that eMusic may even double its revenue in the next year."

The company also announced at CES a new discovery algorithm, dubbed Engineered Serendipity Project, or ESP. The feature is eMusic's take on personal recommendations, drawing upon user purchases, play patterns and eMusic's editorial review archives. The snapshot below shows a sample dashboard, with personalized recommendations.

eMusic's new dashboard, announced today (Photo: eMusic)